Seattle reverses controversial tax Amazon opposed, just a month after approving it

In an embarrassing and mystifying about-face, the Seattle City Council has repealed a tax it passed unanimously just a month ago that would require large companies to pay a fixed amount per employee; the money would have been used to combat homelessness. Amazon was the most high-profile opponent of the tax, but not the only one by far, and apparently the Council decided that fighting the business community was “not a winnable battle.”

The situation was in some ways a microcosm for government and grassroots efforts to wrangle with the extremely complex relationship between the growth of tech and various housing crises. I won’t attempt to characterize it here, but Seattle had come to the conclusion that if your company had more than $20 million in receipts, it could afford to pay $275 (down from a proposed $500) per employee per year.

That would have been some $11 million from Amazon alone, so it fussed mightily and halted construction on several of its skyscrapers downtown. But ultimately it and other seemed to reach an unhappy compromise with the reduced per-employee amount.

Not so: after fighting to have the law modified, Amazon, Starbucks, and Paul Allen’s Vulcan immediately lent their weight and cash to a referendum campaign that would put the tax up to a popular vote in November.

This prospect apparently spooked the City Council so much that a special meeting was announced less than a day in advance, violating Washington’s own law requiring 24 hours’ notice. At this meeting the members voted 7-2 to repeal the tax that just a month earlier they had so confidently stood behind. Councilmembers Teresa Mosqueda and Kshama Sawant were the only holdouts, and cried shame on their peers: Sawant, known for her fiery rhetoric (perhaps too much so, as it has invited costly lawsuits), called it a “cowardly betrayal.”

And indeed, the questionable merits of the proposed tax aside, it seems strange to think that the Council could feel itself so right just a month ago, and now, faced with the prospect of having to convince the public that it’s a good idea, completely abandoned that conviction. Inspiring government it isn’t.

As some have said, perhaps it would be more convincing if there was a detailed and justified plan for how to address the homelessness problem in Seattle, and then a fundraising campaign — including taxes on businesses — created to enable it. Putting the latter before the former struck many as exemplary of a spendy local government of taxing first and making policy later.

At any rate it may be remembered, perhaps not entirely accurately, as a moment when Seattle tried to reach out and touch Big Tech and Amazon slapped them down. Though that oversimplifies the situation greatly, there’s an element of truth to it and we may see it referenced as others mount similar attempts.